Banco Santander Brasil SA
BOVESPA:SANB3
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Good morning, and thank you for waiting. Welcome to discuss Banco Santander (Brasil) S.A. results. Present here, Mr. Mario Leao, CEO; and Mr. Angel Santodomingo, CFO; and Mr. Gustavo Sechin, Head of Investor Relations. [Operator Instructions]
The live webcast of this call is available at Banco Santander's Investor Relations website at www.santander.com.br/ri, where the presentation is also available for download. [Operator Instructions]
Before proceeding, we wish to clarify that forward-looking statements may be made during the conference call relating to the business outlook of Banco Santander (Brasil) operating and financial projections and targets based on the beliefs and assumptions of the Executive Board as well on information currently available. Such forward-looking statements are not a guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events and hence, depend on circumstances that may or may not occur. Investors must be aware that general economic conditions, industry conditions and other operational factors may affect the future performance of Banco Santander (Brasil) and may cause actual results to substantially differ from those in the forward-looking statements.
I will now pass the word to Mr. Gustavo Sechin to introduce all the participants. Please, Mr. Sechin, you may proceed.
Thank you, operator. Good day, everyone. Welcome, and thank you again for joining us for our first Q conference call this morning to discuss our company's results. So here with me, I have our CEO, Mr. Mario Leao; our CFO, Angel Santodomingo; and our Investor Relations team. So now I'm going to first turn the call over to our CEO for his comments. Please, Mario, you may proceed.
Thank you, Gustavo. Thank you all for joining our first quarter results earnings call. It is a pleasure to be here for the first time as CEO of Santander (Brasil). I'll kick off with a very brief overview of the context we're in, then I'll go over some of the strategic priorities I have outlined for Santander (Brasil) in this next growth cycle upon which we are already all working on as a group. So starting with the context, we already noticed in the second half of 2021, the beginning of a deterioration in the credit portfolios resulting from the worsening macro conditions, mainly inflation and interest rates. Given that perception, we've taken several measures to adjust our risk appetite in several portfolios, mostly individuals and small SMEs. That has already been evidenced in our fourth quarter results last year when we grew our portfolio less than our peers and is reinforced now with the portfolio relatively flat today in December, as Angel will present to you in more details.
These measures allowed us to have solid performances in some of our core businesses, such as cards, where we grew fees close to 30% Q-on-Q to a record figure. We believe we have a very good combination of a growth-oriented culture with a good capacity to react to signals, such as those we are now experiencing. Therefore, our risk management culture is considered one of our key assets here at Santander. We still have around 2/3 of our retail portfolio collateralized, and we keep expanding our secured businesses with new products such as our home equity, already a market leader within private banks with 23.4% share and BRL 3.4 billion in assets. Our auto finance portfolio, one of our most relevant has improved its loan-to-value from 54% to 46%. We keep focus on growth and expect to resume a faster pace in the second half of this year.
In terms of our strategic priorities, we have set an ambition to become the best financial services consumer company in Brazil, 100% customer-driven, and we are now positioning our teams and our energy towards this goal. In practice, we will focus on 4 interconnected pillars. The first one as it could be customer centricity. We will incorporate the customer advocacy mindset in everything we do, focusing on the client experience throughout the consumer cycle, presale, sale and post-sale. Designing strong and more integrated sales channels, improving our customers' ability to self-serve and our own resolution capacity, developing dynamic and personalized pricing models based on more intelligent CRM data and segmentation. And shifting our orientation from the typical banking classic product to consumer pool, a critical cultural change that will mean less cards and mortgages and more customers and experience.
We exist to increasingly help our customers improve their lives and fulfill their dreams, positioning ourselves as our true customer advocates who transform in several ways how we operate and will allow us to maintain our growth, our results and our returns. Second pillar is culture and people. We could only aim at this goal with a truly horizontal culture, which we already have, where empowerment, meritocracy and diversity represent key pillars, and all pieces of the engine in connect as business units, not following the traditional front office, middle office and back office definitions and having marketing is a critical component of our culture. We have been the first financial services platform to launch NPS on a full scale all channels perspective. We started at 40 in 2017 and are now running at 57, aiming to achieve 60 plus before year-end. We are shifting our compensation models towards variable payouts based on consumer experience and results, where each of our 50,000 employees are sales persons and are trained to and evaluated by how they understand and serve our customers better than any other consumer company.
The third pillar is our integrated sales channels. We will build the best sales platform in Brazil, focusing on an integrated sale and post-sale offering through which our customers will be served 24/7 at any form day 1 with simplified offering and processes. We truly believe in the benefits of an omnichannel approach, where our digital channel where our customers increasingly choose to be served represents a key pillar, but not an independent one of our offering. We will keep advancing and transforming our traditional customer support team into a powerful and cost-efficient remote sales channel.
We will expand considerably our recently reorganized external channel, achieving several new regions of Brazil in efficient firms. And we will keep reinforcing our physical channel, a key pillar of our integrated sales strategy and an edge comparing to digital-only players. Our cross-sell and credit recovery capacities, for example, are considerably stronger at the stores. We are already designing our vision of Store of the Future. A concrete step is our bank-to-go initiative, where we are capturing the ATM flow into our stores with a tablet-based offering, bringing more speed to our store customers and mobility to our salespeople. We will continuously look at the best cases within the consumer space and serving our customers where they are and how they want to be served.
The fourth and final pillar is innovation and capital. We will seek this transformation into a top consumer company with a continuous focus on organic innovation. The last example was our TransferNowPayLater, so-called DividePIX in Portuguese offering, which -- where customers for the first time, can pay installments, their instant payment transfer the PIX and 90% of the volume so far has been on new personal loans customers. Our UseCasa home-equity product was only launched in 2020 and is already a market leader, as I mentioned before. We've just launched our digital channel for supply chain financing, SX Integra, which will reinforce our position as a market leader in receivables backed financing. And we keep innovating on other products such as mortgages. We have substantially reduced our delivery time on personal mortgages to our market best 19 business days and we'll continue to add innovation to traditional businesses.
All that capital deployment has been centered around delivering strong shareholder returns and payouts, coming from a low tens ROE 6 years ago to a consistent 20-plus ROE on the last few years, one of the best globally. With these 4 cornerstone strategies, we plan to differentiate ourselves from our peers, not only banks, but consumer companies in general. Our evolution keeps based on stability, senior leadership and management model with focus and an obsession with speed. Our recent succession represents our culture frictionless and improving our metabolism, meritocracy and ambition even further. We feel proud to have one of the highest levels of career opportunities in Brazil and the creation of our first technology company represents that well. We keep very focused on the SME space with multichannel services, offering personalized solutions where necessary. We keep expanding our agribusiness footprint as a whole and reinforcing our wholesale platform with strong businesses such as our energy and commodities desks. Overall, we will keep representing a continuous transformation and growth story. And now our leadership couldn't be more excited with the years ahead, including myself. Thank you very much. I'll pass it on to Angel now.
Thank you, Mario. Good morning, everybody, and welcome to this first Q results presentation. Well, the first thing to share with you is a kind of a summary of what we are presenting today. As you may see, we continue to deliver sustainable and profitable growth compared to the past and during the last years. As commented in fourth Q, a combination, and as Mario has mentioned, a combination of higher inflation, increase in interest rates and the level of family indebtedness has provoked a deceleration that we provoked of portfolio growth. Revenue continued to grow consistently, as you will see in the next slides, partially offsetting the impact of rising inflation related expenses on efficiency, reaching 36% in that ratio. Net income continued to be above BRL 4 billion with a return on equity that maintains healthy levels at around 21% or 20.7%. So all those numbers and results have been translated into a consistent shareholder remuneration. The Board approved BRL 1.7 billion of dividend, which means an annualized dividend yield of almost 6%.
Next slide. All this is achieved through client expansion, but more importantly, monetizing that flow, as you can see in this slide. Our total customer base increased by 5.8 million in people in 12 months. But again, our focus is not only on the number of customers, but on how to turn those customers base into a more loyal and profitable one. Loyal customers. And when I mean loyal customers, I am saying those with more than 6 products, so we are being quite asset in that measure, grew more than 2.2x faster than customer acquisition, which means 27% year-on-year. This means that we are not only enlarging the client base, but specifically making it profitable.
Revenues derived from our loyal customers rose by 12%. Acquisition through the digital channels, as you may see also is again showing strong growth. So all in all, a strong growth in clients, a strong growth in revenues, monetizing and making it profitable.
So in next slide, as you may see, we keep enhancing the user experience and boosting engagement as shown by the numbers. Examples of these are 70%, for example, of all new accounts are activated within 4 months, and 25% of new customers become loyal within 6 months. Loyal customers make up 27% of our active customer base that, as you would imagine, are almost 6x -- 5.6x more profitable than the nonloyal ones.
Next slide. We have spoken and shared with you the omnichannel or the 4 channels study, so that the client may choose how to transact, how to make a relation with the bank. Speaking of the 4 channels, the physical channel, I have shared with you in the past that we have close to 15 million people going through our branches, through our shops every single month. 50%, half of that are known customers. But we also have what Mario said, bank-to-go. Bank-to-go, which is already almost 90% of our branches, we have reinvented how we address customer needs and flow on our physical channel. Increasing manager mobility at our branches and innovating the way we bring our products and services to customers. This is a service that we have where the ATMs are before you enter actually on the branch and we activate and make a more speedy way of serving to the clients.
On the digital channel, more than 92% of our customer transactions are already accruing through that channel. 17% -- sorry, 17% of our digitally acquired customers were previously unbanked and chose Santander to establish the first banking relationship. This is another example of how ESG travels in a recurrent way across businesses and in the bank. The remote channel is a critical part of our integrated offer to our clients. Sales increasing more than threefold in just 1 year, reflects what I'm saying. And also quite important to see that almost half of the transactions occur outside commercial hours outside from 9:00 a.m. to 4:00 p.m. And finally, our external channel, which recently launched a new platform, allows us to enlarge our offering to a larger number of Brazilian areas. But channel availability and integration enabled us to boost that commercial activity that you have seen in the previous slides.
As you may see, cards continue to grow at a rapid pace with over 95% of cards being used to current account holders. This is important for our quality of risk discussion that we will have later on. Total, our digital investment brokerage platform added over 90,000 new clients in the first quarter, clearly outpacing the market. Our sustainable business reached 5.2 billion of production in the quarter with our microcredit portfolio experiencing a strong growth of 47%, almost 50%, while our market share of CBIOS issuances reached 56%.
So again, as you may see, this ESG example, something that has coexisted in the bank for at least 20 years now. Moving to the digital front or side of business. The streamlining of processes has boosted our productivity, resulting in a faster time to market for new products and services. Some examples are at 76% of our processes running in the Cloud, 74% of all personal loans are granted through the digital channel -- were granted through a retail channel in this quarter. And lead time for different products has clearly dropped, fast improving NPS, as you will see in the next slide.
And finally, continuing with a long series of efficiency improvement, cost to serve digital customers declined by 25% year-on-year, close to those BRL 24.6 per month, as I said, continuing a long series of drop in cost of service. In Slide 13, we have been repeating these through different quarters, but our focus is and will continue to be attending properly. So making the customer the center of our attention and focus in its satisfaction. A satisfied customer, a promoter, generates 7x more revenues than the average in our case. We have been publishing our NPS score for some time now. It reached 57 points, as you may see, which is a measure based on more than 11 million messages being sent to our customers as well as direct conversations from our commercial units and management. Those 11 million messages mean approximately in between 30,000 to 40,000 messages per day in all our channels. So we are measuring it on a daily basis throughout the different channels.
Next slide, let me insist about our diverse and supportive culture. We continue to make progress on the human in leadership roles and in the proportion of black employees in our workforce. Ambition in this regard continues to be to reach 40% by 2025. And we have a training model based on internal multipliers that has helped strengthening our corporate culture, and that I have shared with you in several quarters. And finally, we have recently launched a new corporate guidance named TEAMS as you may see in the bottom part of the slide. Slide 15, before going to the numbers, I mentioned a little bit about ESG in some of the slides, and we try here to make a summary as it is an integral part of our strategy as I mentioned for the last 2 decades. We are carbon neutral for example, since 2010 and an ambition of achieving net 0 carbon emissions by 2050. We invested more than 280 million of sustainable crops in the Amazon region, and I would like to emphasize also our objective of relying solely on renewable energy by 2025. Currently, this source of energy accounts for almost 60%, 59% of the energy used in our operations. You may see in this slide, different commitments we have communicated throughout this year across with recognitions that we have received lately.
So moving to results. On Slide 17, we detail the P&L we presented to you this morning. Our net profit totaled as I said, 4 billion, up 3.2% in the quarter and flat year-on-year. The quarterly increase can be attributed to a better performance in NII as a result of a better mix and funding results that helped to offset a higher cost associated with the transition to more normalized asset quality and a stronger commercial activity. Let me highlight some of the annual figures on the revenue front. NII rose by 3.8% in the year based on higher customer NII. Fees increased almost 6% over the year. Here, our customer base growth and higher activity boosted revenues from a wide variety of items, including costs.
And on the expense side, provisions grew by 46% in the quarter, in line with what I mentioned in the last 2 quarters' results. General expenses increased due to the collective bargaining agreement and inflation. But besides that, we were able to have a good performance Q-on-Q with a drop of almost 2% or 1.5%. The efficiency ratio came in at 36%, which improved in the quarter, but obviously, with the pressure of higher expenses that I mentioned. And finally, return on equity, we have maintained a 20.7% as I also mentioned in the beginning. So going through different parts of the P&L, next slide explains the evolution of our NII with a strong origin on the client side. Customer NII is growing at 13% Q-on-Q, which is a clear reflection of all what has been said about client growth, loyalty, activity, et cetera. Plus in first Q, product NII advanced by almost 9% Q-on-Q and 25% year-on-year, benefiting from favorable volume dynamics and a better mix in addition to obviously stronger funding results.
Consequently, spreads increased by around 130 basis points on the commercial side. On the other hand, and as I have been sharing with you for some time now, market NII is reflecting our negative sensitivity to movements in the yield curve with an offsetting role from our treasury side or desk. I mentioned in the last quarter that we were already taking limiting decisions on production since September -- approx September last year, September 2021, reflecting the adverse economic cycle we were seeing. Plus and as a consequence of this, our loan portfolio fell by 1.6% Q-on-Q, down to BRL 455 billion. Without the currency effect, that minus 1.6% would have been barely flat, around 0.6% -- minus 0.6%. Individuals continue to outperform in the year with mortgage, payroll, personal loans and credit card explaining part of the growth. It is important to underline that 67% of the individuals loan book is secured is collateralized. SME remained beautifully stable in the quarter, but performed well in the year, expanding by 12%, thanks to the recovery in demand.
Given the ForEx impact, migration to capital markets and a few amortizations were lending dragged down the growth of the total loan portfolio. Our funding also had a positive performance year-on-year and remained stable in the quarter. In this regard, we believe that the rise of interest rates will lead to higher demand for traditional banking products. And at the end of the quarter, as you may see on the right side of the slide, our core capital stood at a comfortable level, reaching a core equity Tier 1 ratio of 11.7% and a ratio of almost 15%. Moving on to fees. Despite the first Q traditional seasonality, we continue to grow on an annual basis, supported by the expansion of our active customer base and stronger loyalty. Current accounts and capital markets were the top performance in the quarter, while cards remained the best performance on a year-on-year basis. Looking at expenses, we again show our strong commitment to control this part of the P&L through a decrease of 1.5% in the quarter.
Let me remember that last September, we had the salary agreement increase of almost 11%. So we start to control costs on a Q-on-Q basis. And even with that, in the year, also, we have an increase of 10-plus percent. They are growing below inflation. We continue to be focused on efficiency, as you will see in the next quarters. As a consequence of all this, and as I mentioned at the start of my presentation, our efficiency ratio ended the quarter at 36%, a healthy level despite pressure from inflation and a stronger commercial activity. And at this level, we may well remain again, the best in the industry.
On the next slide, we can see how our asset quality has evolved. Quality had a deterioration aligned with what was expected and with what we have been announcing to you in the previous quarters. No surprise here. We continue to see the trend, marginal, and not exploring trend. Important to say that we share with you the situation in the fourth Q results and that we took measures starting last September that are having the effect on P&L as expected.
Our cost of risk grew to 3.5% in the quarter. This performance is directly tied to a migration to more normalized levels and the evolution of risked loan products in our mix last year. We are currently running in different ratios at almost or around prepandemic levels. We have also released approx 0.8 billion following of our following what it was built for. Credit recovery once again performed well in the quarter, reaching BRL 740 million, thanks to both continued solid management and the sale of down portfolios. Now let me revert to you, Mario, for the closing remarks. Thank you.
Thank you, Angel. So just wrapping up. In terms of strategy, we aim to be the best financial services consumer company in Brazil with 4 key pillars, as I mentioned before, we will be centered around the customer with customer advocacy mindset in everything we do. We will focus more and more on customer experience throughout the cycle, not only the sale but wholesale. We will have integrated sales channel on an omnichannel approach, whereby each channel represents a pillar in itself, not an independent, but in an integrated mindset. We have 50,000 people within our culture which think themselves and behave themselves more and more salespeople. We are shifting compensation towards allowing these people to be remunerated by the way they serve, the way they listen and the way they act. In terms of innovation capital, as I mentioned before, we keep focusing on organic innovation. We have very good examples live as we speak. Some things we launched a few years ago are already market leaders.
And all that with a capital orientation throughout we deliver some of the industry best payouts and return on equity to our investors. We have delivered consistently over the past few years. We're delivering again in the first quarter. The ROE of 20.7% represents that. We keep adding clients. So we have a customer historic, part of our customer centricity relies on how we bring customers, how we make them more loyal, how we make them interact with us more and more. We are doing that. We keep the loan portfolio under control. Our risk-oriented culture allowed us to have a very positive quarter, as I mentioned, in some of our key portfolios such as credit cards and a few others, and we keep having responsible growth throughout Brazil as a whole throughout the society and with a clear focus on ESG.
Overall, Santander (Brasil) will keep being a strong and continuous growth story, shifting more and more to our customer centricity, customer advocacy mindset. And with that, we now open for Q&A. And thank you very much again for joining this call.
[Operator Instructions] We will now start the Q&A session for investors and analysts. I will now pass the word to Mr. Gustavo Sechin, Please, Mr. Sechin, you may proceed making the questions sent via webcast.
So we're going to start the Q&A. Our first cup of questions with regards our asset quality in terms from new different loans, JPMorgan; Gustavo Schroden, Bradesco Tito Labarta, Goldman Sachs. So they are requesting us our view for NPLs in 2022. And also, if we continue to see the return to 2018 levels or if we see a more challenging outlook given the early delinquent increase in the first Q 2022. And also, they request us to comment on the increase in provisions in the quarter.
Okay. Let me elaborate on quality as I have tried to do a little bit through my presentation. Let me remember what we discussed in last quarter results and what we'll be discussing with you throughout this quarter in the different meetings we have had. We started to take limiting production measures last September 2021, which meant that as you show in the performance of the loan portfolio in 4Q performance, we are already growing at a lower speed.
And in this quarter, we do have growing business, as you may have seen on the retail side and part of the SMEs, et cetera. But the portfolio barely remained flat. While we did that, and that is something like 6 or 8 months or 9 months ago, is because we started to see the different variables a little bit more tension. So what is happening right now? We are in the moment in which we have already taken those measures. We think that the measures we have taken are enough. Those measures are starting to have some impact on the P&L, but still provisions.
[Audio Gap]
Since last year, and we may not see any concerns in those mid-corps upwards portfolio. The second comment is on the small SMEs, as I mentioned before, and individuals even on those portfolios where we took measurements in terms of risk reduction since September, October last year, in some of those portfolios, we are already taking new measurements to resume expanding the portfolios again using CRM data, using personalized pricing and risk validation. So we are improving our models as we speak so that we can already resume some of those portfolios growing back to levels as we saw last year. So given our growth orientation, we will keep the risk mindset, the risk mentality, the first line of defense, as you say, but we're already looking through CRM data and personalized segmentation we are already looking at expanding the portfolios again.
Thank you, Angel. Thank you, Mario. So our next question comes from Thiago Batista, UBS; and Marcelo Telles from Credit Suisse and are related to the credit. Thank you Thiago. Thank you, Marcelo. So they are to comment on how much loan growth should expand in 2022. If we see the need to further reduce in our risk appetite or tightened credit standards.
Okay. Thank you, Thiago and Marcelo. We kept account this year that will currently grow in GDP nominal terms at around -- it depends on how we end here in terms of inflation but around 8%, 9%. So seeing volumes growing at low double digit or close to double digit, I don't think it should be a struggle. So we continue to see that kind of capacity in terms of growth. We see the retail side growing during the next quarters, probably the SME side, as Mario said.
On the large corporate segments, there, you have competition from capital markets, competition in terms of investments, how the policy of investments is done, how the geopolitical general situation is going to. So you get all the values on top of the discussion around volumes and quality, et cetera. Do we see more tightening? Not at this stage. As I was mentioned, we are reopening some cases in a small part of the business. We are considering the growth capacity of our commercial kind of framework. So we don't see added decisions for the time. I think we took it at the right moment. That is some time ago and that has worked perfectly as was the past. Remember that in 2019, we did the same thing with credit cards, and it worked pretty well.
Thank you, Angel. I think that we have some connection issues in the first question. So I will make the question again relates to the asset quality. The question was from Yuri from JP Morgan; Gustavo from Bradesco, and Tito Labarta from Goldman. Thank you, guys. So the question is related to our NPLs in 2022, our view. And if we continue to see it returned to 2019 levels or if we see a more challenging outlook given the early delinquency increase in the first Q and also they requested us to comment on the increase in the provision in the quarter.
Okay. I'm sorry about that. I'll try to repeat my answer before. Thank you, Yuri, Gustavo and What I was saying was that we took -- and I shared this with you, if you remember in the fourth Q results and in different meetings that we have had through this quarter. We already took the measures. We thought we had to take starting September 2021, okay. Those measures on production we are taking. If you remember on the date on the 4Q, Santander (Brasil), we had a lower growth in terms of the loan portfolio. And the one that we have presented today means that barely the portfolio is flat in terms of amount, in terms of growth.
As I said in the previous question, we think that the measure we have taken right now that they were taking at the right moment, that is 6, 8, 9 months ago, and now we are in the moment in which those measures -- remember, we have a duration of 1 year on the loan portfolio excluding the mortgages. So we are in the moment in which the decisions obviously are limiting the growth of the loan portfolio, and we still have the cost of risk impact of the production that was taken before that. So we are in that moment on which still provisions reflecting that previous reality and the loan portfolio growing at a lower pace. What we do we see looking forward -- looking into the next quarters or months, we have already reopened and part of the production. So in parts of the portfolio production will recover because we already, as I said, took those decisions some time ago. And at the same time, we think that the cost of risk and provisions, et cetera, should reflect all those measures going to second semester of the year. And Mario, also some comments.
I just wanted to emphasize what just mentioned. So using CRM data using personalized segmentation, both for coverage and also risk modeling, we are already taken steps to reopen some of the risk restrictions we enacted for the past 6 months. So we are already re-expanding some of the key portfolios in our retail division. From our mid-corp in terms of the corporate segment, we did not foresee any issues last year. We keep not foreseen. So we are going to grow based on profitability. So the opportunities are rising. We will be there. We have loans of credit lines available and also the funding capacity to keep expanding our mid-corp and large-corp businesses. It has been tougher given the competitiveness of local capital markets. And obviously, companies are funding less given lower level of investments. But those portfolios remains very healthy, and we will keep expanding those as opportunities arise.
Thank you, Mario. Thank you, Angel. So the next questions come from Gustavo Schroden from Bradesco; Thiago Batista, UBS; and Gilberto Garcia from Barclays are related to NII. So what should we expect in terms of NII with clients and NII with markets in the coming quarters. We assume that the first Q 2022 is a proxy for the coming quarters.
Okay. In terms of NII, I tried to underline how -- what are the main metrics that are below what would [indiscernible]. As you said and as you saw, NII from clients has performed strongly. And this is based on several things. It's based on volume linked to, obviously to mix, is also linked to spreads and it's also linked to products within the [indiscernible]. So the 3 variables worked very well, along with NII from the liability side that with the interest rate levels, obviously, is also has been supporting that number.
So that is the basic explanation. Again, we are in terms of transaction, in terms of number of clients, in terms of the lean clients, I gave you all the numbers to the presentation. We are growing much more in the lean clients than in total clients and also we are growing a lot in total clients. So we are not only growing clients, but monetizing and strongly linking them and transforming those clients into loyal clients. Loyal client is meaning more than 6 which is high. So NII from clients should continue in the direction through.
NII from market. I explained, at least in the last 2 quarters, that NII from markets will start to perform lower, given our negative NIM sensibility to movements of the yield curve. Last year, we had the strongest yield curve movement in -- I think it is like 20 years. We have 800 basis points of 2Q move. As you know, the sensitivity that we have because we have BRL 450 million for a 100 basis point movement if it is a parallel movement given that there was not the different impacts there.
But that means that the results from the portfolio we are and will be much lower during the next -- normally, during the first year, 1.5 years, depending on the yield curve and on the movements of the yield curve. So that is basically what is happening. You have an offsetting position from our treasury activity that has had a good quarter. But going forward, what I would say is that I would -- what I said to you in the last quarter is clearly reflecting that negative sensitivity to move many interest rates which what is happening. So nothing abnormal in terms of performance, the exception that the comparison always is a little bit strange because you see strong movements.
Thank you, Angel. Our next question comes from Gustavo Schroden, Bradesco; and Yuri Fernandes from JP, and are relate to other revenues and other expense and also non-operational results. So we could see a better performance in the other lines and nonoperating income. Can you explain what is included in these lines and which line had a positive impact on that? And also, can we please explain this consolidation. Does Santander plan to divest from this asset.
Thank you, Gustavo and Yuri. Well, in that line, I have always explained to you have a different kind of inputs and impacts, positive and negative. It's always, I understand perfectly the new situation in terms that it is difficult to estimate because it has certain volatility as has been in the past and will probably be in the future. So what is inside, I always said to you have a different level and similar provisions. You have authorizations in terms of interest rates.
You have a little bit of impact from the ForEx exchange rate. Importantly, you have transactionality costs there. So the larger the transactionality improves or goes, the more impact you will have, et cetera. So you have recurrent and nonrecurrent items there that make that volatility clear throughout the quarters. We already had also the CIP operation. We -- this is an accounting movement in terms of moving from cost to investment in terms of how you account for it, and that was also included there. But again, difficult to say with for further or for next quarter, the evolution of that.
So our next question comes from Flavio Yoshida from Bank of America. The trust on cards growth is at checking account holders. How do you find NPLs from non-checking account holders from those who have check-in account at Santander. Should this trend change in the short, medium term? Is the bank lowering cards limit for riskier clients?
Well, as we presented, cards continue to be an important part of the business in several areas. What we have done with credit cards, as I said, is at 95%, the vast majority of the cards that we are selling today, are those are being sold to current account clients. That means that we know the risk profile and we know the evolution we have with that. We commented in the past, I mean, for example, open was the credit cards or digital credit cards, they tend to perform worst that this have already clients that are Santander clients, we know their profile.
This has also been quite active through the different channels. For example, on the remote side, we presented the numbers. We -- 1 year ago, we're selling almost 300,000 products per month. Now we are selling 800,000 products per month. And those products are a large part of that includes the credit card. So the strategy continues to be well positioned in that sense we are applying efficiency to the product in terms of the opening products, and we will continue in that line. Mario, you want to make some comments?
Yes, just to add to what Angel mentioned. So cards is one of our "Monoline" Historically, it's 85 points NPS product. It's one of our key pillars for sure. But we want to integrate all our "Monoline" to a totally integrated offering, again, customer centered with a customer's advocacy mindset. So with that in mind, we have shifted our strategy over the past few years towards cardholders, which are account holders as well, which means clients, customers, which are fully customers of Santander (Brasil) and through which we can explore our offering on our integrated channels.
That strategy is not only with cards. We're doing the same with our consumer finance company, our auto loans, which is the largest in Brazil, our consumer finance company for goods and services as well. And with that integration of our entire ecosystem, we believe we have a very strong growth outlined to develop here. We're already doing that with cards, as I mentioned. We will do so exploring all synergy opportunities we have within our ecosystem. We will talk more about this in the coming quarters. And we believe cards is a very good example of how we should operate as an integrated offering to our clients, our customers and not necessarily independent Monoline approach.
Thank you, Mario. Thanks, Angel. So our next question comes from Tito Labarta, Goldman Sachs; and Gilberto Garcia from Barclays and are related to taxes. So can we also commented on the relative low tax rate in the quarter. And what should we expect going forward?
This has to do -- I mean, as always, it has to do with interest on capital. I remember that the dividend that we have announced, part of those dividends are interest on capital, which have a good tax achievement. We will continue to optimize that throughout the year. We always give you a guidance of around 30%, 33% approx on the tax rate that we should have throughout the year with up and downs depending on that interest on capital.
So our next question comes from Mario Pierry from Bank of America. And -- so the question is, we note that your branch network declined by 10% quarter-on-quarter, but your headcount remained relatively stable. Can we discuss the outlook for further branch closures and if they should be relatively followed by a reduction in the headcount.
I'll take this one, and we're very brief. As I mentioned a few times already, we have been and we keep being a growth story. And that growth story is represented by a very strong sales channel, which we will keep improving; and a reliance on our physical channel, which we truly believe is one of our key advantages, not legacy in the bad sense. We believe it is one of our differentiations, and we will keep expanding our physical footprint throughout Brazil both in terms of new cities and regions and also in terms of new neighborhoods in cities which are expanding. We will do so with the mindset of looking at the portfolio we have and potentially merging stores and looking at whether we can relocate stores so that we serve better our clients, we are closer to them, we're closer to the flow.
And that will be a continuous exercise. This number, this figure Q-on-Q and year-over-year is the reduction per sales on a reduction of stores, mostly 90-plus percent of that number represents the consolidation of branch codes, which we're now joining into one code, formerly speaking, is a reduction of branch codes, but it's much less a reduction of physical stores than, as I said, branch code. So it's more a formality and it's something we're doing to basically clean up the number of branch codes we have, which is a formal figure we have with the Central Bank. But again, it is -- the mindset is that of an expansion throughout all channels, including the physical one, and we will keep talking about our expansion in the physical channel throughout the quarters. Thank you.
So our next question from Thiago Batista from UBS. Can you confirm to us if the portfolio sold in the quarter impacted any ratio. And how much results it has generated?
We do all this kind of portfolio of sales when we do them. They are fully written off. So we only sell fully written off portfolio. And it's business as usual. We do every single year. We had them in some quarters in the -- in this quarter, we did have sale and portfolio being sold of around BRL 100 million, if I remember well. But again, this is something that is an ongoing process with fully written off portfolios.
Thank you, Angel. Our next question will come comes from Carlos Gomez from HSBC. Could you give us an update on your views on 2 areas out lending and investment platform? Do you expect to maintain your market share in auto loans or is becoming more confident? And what are your aspirations in the investment areas? Will you compete with [indiscernible]?
Okay. Let me try to address both areas and probably Mario will also want to join us afterwards. On the auto, the auto sector is, as you know, is clearly going through difficult moments in terms of volumes. So the total number of cost is dropping by around depending on the month 15%, 20%, 22%, which means that the activity as itself in the sector is low. What has been our position, along with the measures I already said before starting last September, et cetera. What we are doing is we are building -- or we have built in fact, it's already done. We have built capacity to address different publics and clients that we were not addressing before with the same capabilities and the same capacity of growth.
And this is, as I speak today. So this is happening in April, and we will continue in that direction. We continue to build a full ecosystem. We are leaders in the country and we want to keep on this business. We don't want to go in and out of that sector. We want to structurally maintain the activity in the lending, and that means not only our financial unit, that means -- that means the different acquisitions we have done [indiscernible] solution for that we have announced go in the direction of having a strong. On the investment side, this is one of our core strategies. I mean, we are going into that for some time, and we will continue to grow into that field for some time. We are building a new platform, et cetera, et cetera. But we think that when we speak of lean clients, it also means clients through the liability part of the balance sheet. And again, that is something key and totally important for us.
Just adding specifically to the investments platform, like I have mentioned, this is one of our key strategies for not only this year, but the next few years. We are closing a very important step now in terms of technology offering we are delivering as we speak, a much stronger investment platform for our clients and salespeople within Santander, they talk to clients about investments. And that's for the year will provide a big leap forward in terms of our technology offering and experience to our clients.
In terms of sales efforts, we already have the advisers. We have 350-plus advisers team already talking on a much more personalized base to our select and clients, which are welfares in terms of assets. We will expand that platform within Santander, not to external offices. We will expand through Santander 4 -- fivefold across the next 2 years. So that will be a big investment we're going to make in terms of providing more personalized content and approach, which has to be on a personalized basis as well. That, together with the technology platform that I mentioned before, we provide a very big step forward towards our investment platform, and we will be even stronger than we are today, expanding the product offering as well, but mostly focused on the distribution channel and technology platform. So yes, we are very focused on that, and we will keep expanding here. Thank you.
[Operator Instructions] Our first question comes from Pedro Leduc with Itau BBA.
A bit on NII, could you help us understand a little more what drove the fresh results so close to 0? And -- just to help us see how it will carry onto the next quarters. And still on NII on the product portion. We wonder how far you think you are in terms of repricing their credits, the new credits to the cost of funding and cost of credit reality that's upon us. I think you already have way or more in the final rounds of repricing in your lines. Thank you.
Well, I tried to explain on my previous answer, basically negative sensitivity to movements in the yield curve, which is a negative impact on that part of the P&L, positively impacted by our results in Brasil. That's basically the summary of what I tried to explain to you. And the summary of the number that is shown in terms of the market. And this is a trend. As I mentioned in the last 2 quarters, at least, I don't know more than that, but for sure, the last 2 quarters, this is a trend that will continue throughout 2022. Again, given our duration on the asset side and given the yield curve movement and the yield curve shape that we have today, this should last 1 year, 1.5 years, depending on how it moves from now on. Remember that we hedged the commercial units in terms of cost of fund, okay. So this is how it is reflected in our business model. The second part of the question was?
Price.
Pricing, sorry. yes. And we have already, on the spread side, you have 2 impacts, the funding side or the liability side and the time, price, how it is evolving. What has happened is that during 2021, as the cost of funding was going up, that spread was pressure. We finalized that transferred throughout fourth Q and first Q. So I would say that now on the movements on the yield curve will probably be more positive on that side. But are we done with the price evolution, it will depend on how things move in terms of the yield curve. In terms of transferring what has happened up to now, the answer is clearly yes, but that was already as such during the last at least 2 quarters.
Thank you. The Q&A session is over. I will now pass the word to Mr. Gustavo Sechin for your final considerations.
So I would like to thank you very much for joining us today. We know that we have a couple of more questions. But due to given the hour, we will try to answer you readily. And also again, we are fully available here for any further questions, and thank you. Have a nice day. Bye.
Banco Santander (Brasil) conference call has come to an end. We thank you for your participation, and have a nice day.